Throwing Caution to the Wind, Lodging Industry Gets Back to Business

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Bob Hunter said he was taking the cautious out of the “cautious optimism” phrase that has described the lodging industry for the better part of three years. “The glass is more than half full,” he said during the opening of the 24th annual Hunter Conference at the Marriott Marquis in Atlanta on Monday.

Unbridled may not be the exactly right word to replace cautious, but there's no doubt the mood at the Marriott Marquis the past two days has been far more positive and real than at any event during the past three years.

“We should stop talking about doom and gloom,” said Carlson Rezidor EVP Nancy Johnson, also the AH&LA chair.

“We should feel pretty damn good,” said FelCor Lodging Trust Chairman Tom Corcoran during his keynote address. “We'll have a long term run of success now. This will lead to a great decade for the industry.”

Even the numbers guys were confident. Mark Woodworth reiterated PKF's forecast, calling for a 5.8% boost in revenue per available room this year, led by a 4.1% gain in average daily rate. PKF has reported six straight quarters of ADR growth, and with new supply limited, Woodworth said, “We are confident forecasting a sustained period of attractive industry profit growth.” PKF's latest issue of Hotel Horizons projects occupancy gains through 2016, which would be an unprecedented six-year run of growth that began in 2010.

Tim Hart, an EVP from TravelClick, said group, transient business and transient leisure business were all up in roomnights booked and rate. He said the most promising sign was group business was back and getting stronger.

And even better news, those not on stage were saying the same types of things. Owners, operators and brand company executives didn't just sound positive, they were positive. I met the owner of two smaller midscale hotels in the Midwest who paid to attend the conference because he's looking to add to his portfolio and move up the ladder and expand his business.

Two years ago, owners like him were at these events, if they could even afford to travel, looking to find a buyer. Attendance at the conference was at an all-time high, Bob Hunter said.

Times really have changed. Rajeev Dhawan, an economist from Georgia State University, did caution of potential pitfalls with rising gas prices, a “mild” European recession and an Asian slowdown. He said it might not be that the economy is accelerating, but “it's that the headwinds have lessened.”

The messages at Hunter — be confident and raise rates, lenders are returning to lodging, new construction isn't far off, things are better — were the same at other recent events, this time they sounded far more real.

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